Three Members Form an LLC in the Current Year

question 37

Multiple Choice

Three members form an LLC in the current year. Which of the following statements is incorrect?

• A)The LLC's default classification under the check-the-box rules is as a partnership.
• B)The LLC can elect to have its default classification ignored.
• C)The LLC can elect to be taxed as a C corporation with no special tax consequences.
• D)If the LLC elects to use its default classification, it can elect to change its status to being taxed as a C corporation beginning with the third tax year after the initial classification.

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Definitions:

Phi Effect

A phenomenon of visual perception in which the illusion of movement is created when stationary objects are viewed in succession rather than simultaneously.

Visual Cortex

The region of the cerebral cortex responsible for receiving and interpreting sensory signals from the eyes.

fMRI

Functional Magnetic Resonance Imaging, a neuroimaging procedure that measures brain activity by detecting changes associated with blood flow.

Flashing Pattern

A visual signal sequence where light is turned on and off in a particular rhythm or sequence, often used in warning signals or communication devices.